As the nation’s political divide continues to widen, companies that have traditionally confined themselves to neutral positions are becoming increasingly outspoken. In many cases these companies are taking political stands for or against elected officials or government policies on the grounds that they have a responsibility to society at large. So what does this mean for the future of marketing and how companies appeal to consumers?
According to Drexel University’s Daniel Korschun, PhD, an associate professor of marketing in the LeBow College of Business, who has focused his research on corporate political activism, taking a stand can benefit companies. “It can really drive loyalty on the part of consumers,” he said. “Consumers are purchasing more than the product, they’re purchasing an affirmation of who they are and what they stand for.”
Korschun recently co-authored an editorial for the Journal of Public Policy and Marketing that looked at the role of marketing in understanding political activity. The piece looked at how the political world is increasingly encroaching on the business world.
According to the authors, this new reality can result in surprising dialogues between political actors (elected officials, community organizers, political pollsters) and companies, oftentimes involving ordinary citizens as well. To better understand things, the authors went back to the very definition of marketing and how the discipline is concerned with how individuals and institutions perceive and exchange values that impact a number of stakeholders. They provided a framework for understanding marketing and political activity.
“Marketing is concerned with how values are communicated and delivered to people, and that makes it a powerful perspective when it comes to understanding why and how political messages are becoming more common in the business world,” said Korschun.
Using the diagram below, the authors illustrated how and what environmental forces create circumstances for multiple actors—companies and brands, citizen stakeholders and political entities— to engage with each other through a political and marketing lens and lead to a variety of outcomes that can be categorized into societal, collective, political actor, corporate and individual.
Companies have always been linked to the political environments in which they operate, spending billions of dollars each year on lobbying or through political action committees trying to influence government policies, elect particular candidates or shape political issues. However, after a Supreme Court decision in 2010 extended political freedoms to companies, their attempts to influence legislation and policies are more obvious.
The authors cited the example of Patagonia, a brand that sells outdoor clothing, that created a space in stores for customers to sign petitions against President Trump’s executive order discontinuing protections that would reduce the size of federal parklands.
Korschun said the company represented the “gold standard in corporate activism” at the time because it had consistently aligned itself with issues that make sense for the brand and that its customers care about.
“Many other companies are not as clear about what they stand for,” he told Inc. “They sometimes contradict themselves, and engage in fits and starts, which harms some of their message. When that happens, they run the risk of being called hypocritical in their actions.”
Nike was one of the first companies to highlight racial injustice when the company aired an ad during the 2018 National Football League season opener narrated by Colin Kaepernick, who became a national figure in 2016 when he chose to take a knee while playing for the San Francisco 49ers rather than stand during the national anthem as a protest against racial injustice in the United States.
“For the current generation of marketing managers, Nike really defined how a controversial socio-political issue can be used to differentiate the brand,” said Korschun. “Some customers protested, but Nike’s overall sales increased shortly after the campaign launched.”
Citizen stakeholders or individuals and groups that are influenced by business and politics place personal stakes, such as money to purchase the product or voting for a political candidate, to have a claim on corporate and political outcomes. As the authors note, citizen stakeholders also have ways of influencing outcomes that include, voting, demonstrating and protesting or showing support by signing petitions. Many nowadays also turn to social media.
According to the authors, marketing and political activity will continue to collide as long as companies, citizens stakeholders and political entities believe that companies play an important societal role. The only difference with polarization is that the common ground is lost.
“As Americans become more polarized and extreme in their views, the middle ground disappears and all three sets of actors have starker choices to make that are likely to be accepted by only one polarized group,” said Korschun. “Political polarization especially can lead to mistrust activating attributions that an actor’s choices are nothing more than an attempt to mislead others.”
Korschun believes this loss in middle ground and heightened mistrust can be the reason for the recent uptick in corporate activism. “Companies concerned with the impact of politics on performance may find themselves in a delicate balancing act,” he said. “Sales potentially lost by those against a company’s political position need to be made up by additional sales from new customers or those that stay.”
Social media and technology have changed the way these actors communicate and influence outcomes. In the aftermath of George Floyd’s death the response was global, with individuals connecting on social media to organize demonstrations and document them. At the same time, many companies suggested they would stop advertising on social media if those social media companies didn’t stop glorifying violence. This kind of collective political activism can influence political actor outcomes, according to the authors. They also highlighted how much cell phones contribute to activism noting how easy it is nowadays for individuals to film wrongdoings in real time and share them virally.
“Through collective activism individuals can hold both companies and political entities accountable,” said Korschun. “If enough citizen stakeholders express displeasure with the status quo policy, it may lead to government officials making more frequent mention of issues in speeches or other public forums. By engaging in activism, corporations also contribute to changes in legislation or regulation.”
But Korschun warned that with political polarization and the lost middle ground, there is the potential that marketing can be used to fuel political extremism. “Businesses have the potential to represent the interests of diverse constituencies who are sometimes voiceless,” he said. “So it’s critical that we make sure companies don’t end up widening existing divisions or using politics as a means to increase market power.”